Venture capital funding in Europe falls to the lowest level on record 😳; JPMorgan reports record revenue 🤑; Monzo + Plaid is all about Plaid, NOT Monzo 👀

FinTech is Eating the World, 17 April

Hey Everyone,

Happy Monday! We’re starting a new week with a proper bang ⚡️ On today’s radar we have a look into VC funding in Europe that falls to the lowest level on record (look at the data & what matters), JPMorgan that just reported record revenue (& why it’s the Microsoft of Banking), and Monzo + Plaid deal (why it’s all about Plaid, NOT Monzo here). Let’s jump straight into the hot stuff 🌶

Venture capital funding in Europe falls to the lowest level on record 😳

Following the money 💸 Dealroom recently analyzed the latest venture capital data in Europe, and it’s not great at all.

Just over 2,300 rounds were closed, which is the lowest number since Q3 of 2016. Let’s take a look at the key facts and figures.

ICYMI: OpenAI & Stripe kept the global VC funding alive in Q1 🥲

More on this 👉 Here are the 3 most important things Q1 VC funding in Europe.

First, we must note that although the total funding raised equaled €14.3 billion and it wasn’t that bad, it is the worst since only the third quarter of 2020. More importantly, this is the first time since 2016-17 that a slow Q4 has preceded an even slower Q1. Will this become a trend? 🤔

Second, this undoubtedly hit the unicorn creation in Europe 🦄 And it hit them badly. According to Sifted, just one unicorn was minted from January to March this year. You guessed it - it’s the German AI translation startup DeepL. 

ICYMI: ChatGPT for Finance is here, and it’s a game-changer 🤯

That makes Q1 2023 the worst quarter for unicorn creation since Q2 2020, at the height of the pandemic. Ouch 😬

Finally (and unfortunately), FinTech was Q1’s biggest loser. Investment in the financial technology space plummeted by a whopping 83% to $2 billion from the record $9.7 billion the sector hit in the same period last year.

We must remember that FinTech has surpassed 300 rounds each quarter for the past 7 years, thus, Q1’s 212 rounds represents a massive drop off for the one-time darling of European tech. Who took over? According to Sifted, Deeptech, climate tech, and healthtech (have emerged as the region’s frontrunners.

✈️ THE TAKEAWAY

Looking ahead 👀 The latest data clearly shows that ongoing global macroeconomic challenges, including supply chain disruptions, inflation concerns, and geopolitical uncertainties, have impacted investor sentiment and contributed to the slowdown in fundraising activity in Europe. Regulatory changes, especially when it comes to FinTech and PropTech, have created uncertainty and impacted investor confidence, leading to a decline in fundraising activity in these sectors especially. Yet, if you’re doing something at the intersection of Finance and Artificial Intelligence, this could be your best year ever. So keep on building!